Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $81,400. The machine's useful life is estimated at 20 years, or 387,000 units of product, with a $4,000 salvage value. During its second year, the machine produces 32,700 units of product.

Straight-Line Depreciation Choose Numerator: 1 Choose Denominator: Annual Depreciation Expense Cost minus salvage / Estimated useful life (years) = Depreciation expense Year 2 Depreciation Year end book value (Year 2)